FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

               For the quarterly period ended September 30, 2002
   --------------------------------------------------------------------------

                                       OR

             ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

For the transition period from ____________________ to ______________________

                             Commission file number
                                     0-21558
                     ---------------------------------------


                            CNL Income Fund XII, Ltd.
-----------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


        Florida                                            59-3078856
----------------------------------              -----------------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                         Identification No.)


450 South Orange Avenue
Orlando, Florida                                             32801
----------------------------------              -----------------------------
(Address of principal executive offices)                   (Zip Code)


Registrant's telephone number
(including area code)                                   (407) 540-2000
                                                -----------------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes X No _________


<PAGE>

                                    CONTENTS





Part I                                                                  Page

   Item 1.    Financial Statements:

                  Condensed Balance Sheets                                1

                  Condensed Statements of Income                          2

                  Condensed Statements of Partners' Capital               3

                  Condensed Statements of Cash Flows                      4

                  Notes to Condensed Financial Statements                 5-6

   Item 2.    Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                     7-10

   Item 3.   Quantitative and Qualitative Disclosures About
                  Market Risk                                             10

   Item 4.   Controls and Procedures                                      10

Part II

   Other Information                                                      11-12






<PAGE>




                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                             September 30,            December 31,
                                                                                  2002                    2001
                                                                           -------------------     -------------------

 <c>
                               ASSETS

   Land and buildings on operating leases, net                                  $  23,000,483           $  21,325,863
   Net investment in direct financing leases                                        8,005,900               8,143,625
   Real estate held for sale                                                               --               1,376,319
   Investment in joint ventures                                                     4,453,437               4,577,565
   Cash and cash equivalents                                                        1,079,166               1,281,855
   Certificates of deposit                                                            542,526                 545,107
   Receivables, less allowance for doubtful accounts of $53,499
       and $51,016, respectively                                                        8,941                   5,584
   Due from related parties                                                            10,510                  25,037
   Accrued rental income, less allowance for doubtful
       accounts of $9,061 in 2002 and 2001                                          2,670,356               2,486,119
   Other assets                                                                        66,793                  69,537
                                                                           -------------------     -------------------

                                                                                $  39,838,112           $  39,836,611
                                                                           ===================     ===================

                  LIABILITIES AND PARTNERS' CAPITAL

   Accounts payable                                                             $      20,083            $     22,119
   Real estate taxes payable                                                           23,252                   7,037
   Distributions payable                                                              956,252                 956,252
   Due to related parties                                                              33,853                  25,885
   Rents paid in advance and deposits                                                  26,453                 175,992
                                                                           -------------------     -------------------
       Total liabilities                                                            1,059,893               1,187,285

   Partners' capital                                                               38,778,219              38,649,326
                                                                           -------------------     -------------------

                                                                                $  39,838,112           $  39,836,611
                                                                           ===================     ===================

</TABLE>
           See accompanying notes to condensed financial statements.


<PAGE>
                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>

                                                                Quarter Ended                   Nine Months Ended
                                                                September 30,                     September 30,
                                                             2002            2001              2002             2001
                                                        ---------------  --------------  ----------------- ---------------

 <c>
Revenues:
    Rental income from operating leases                     $  719,587      $  622,771       $  2,077,641    $  1,971,701
    Earned income from direct financing leases                 228,319         235,898            688,731         730,716
    Contingent rental income                                     7,127           7,877             21,789          12,485
    Interest and other income                                    2,611          28,214             11,994          74,708
                                                        ---------------  --------------  ----------------- ---------------
                                                               957,644         894,760          2,800,155       2,789,610
                                                        ---------------  --------------  ----------------- ---------------

Expenses:
    General operating and administrative                        73,644          49,899            236,367         299,072
    Property expenses                                            7,376          25,967             25,394          68,033
    Management fees to related parties                           9,785           9,542             31,684          30,520
    State and other taxes                                           --              --             49,763          59,150
    Depreciation and amortization                              115,114          90,473            333,900         312,286
    Provision for write-down of assets                              --              --                 --         362,265
                                                        ---------------  --------------  ----------------- ---------------
                                                               205,919         175,881            677,108       1,131,326
                                                        ---------------  --------------  ----------------- ---------------

Income Before Gain on Sale of Assets and Equity in
    Earnings of Joint Ventures                                 751,725         718,879          2,123,047       1,658,284

Gain on Sale of Assets                                              --         345,279                 --         345,279

Equity in Earnings of Joint Ventures                           101,659         101,078            307,874         260,226
                                                        ---------------  --------------- -----------------  --------------

Income from Continuing Operations                              853,384       1,165,236          2,430,921       2,263,789

Discontinued Operations (Note 4):
    Income from discontinued operations, net                     8,776          16,512             65,645         101,200
    Gain on disposal of discontinued operations, net           167,083              --            501,083              --
                                                        ---------------  --------------  ----------------- ---------------
                                                               175,859          16,512            566,728         101,200
                                                        ---------------  --------------  ----------------- ---------------

Net Income                                                 $ 1,029,243     $ 1,181,748       $  2,997,649    $  2,364,989
                                                        ===============  ==============  ================= ===============

Income Per Limited Partner Unit
    Continuing operations                                    $    0.19       $    0.25         $     0.54      $     0.50
    Discontinued operations                                       0.04            0.01               0.13            0.03
                                                        ---------------  --------------  ----------------- ---------------
                                                             $    0.23       $    0.26         $     0.67      $     0.53
                                                        ===============  ==============  ================= ===============

Weighted Average Number of Limited
    Partner Units Outstanding                                4,500,000       4,500,000          4,500,000       4,500,000
                                                        ===============  ==============  ================= ===============

</TABLE>
           See accompanying notes to condensed financial statements.

<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>


                                                                          Nine Months Ended          Year Ended
                                                                            September 30,           December 31,
                                                                                 2002                   2001
                                                                         ---------------------    ------------------

 <c>
General partners:
    Beginning balance                                                          $      259,109          $    259,109
    Net income                                                                             --                    --
                                                                         ---------------------    ------------------
                                                                                      259,109               259,109
                                                                         ---------------------    ------------------

Limited partners:
    Beginning balance                                                              38,390,217            38,946,975
    Net income                                                                      2,997,649             3,268,250
    Distributions ($0.64 and $0.85 per
       limited partner unit, respectively)                                         (2,868,756 )          (3,825,008 )
                                                                         ---------------------    ------------------
                                                                                   38,519,110            38,390,217
                                                                         ---------------------    ------------------

Total partners' capital                                                       $    38,778,219         $  38,649,326
                                                                         =====================    ==================
</TABLE>
           See accompanying notes to condensed financial statements.

<PAGE>

                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>


                                                                                   Nine Months Ended
                                                                                     September 30,
                                                                               2002                 2001
                                                                          ----------------     ---------------

 <c>

Increase (Decrease) in Cash and Cash Equivalents

    Net Cash Provided by Operating Activities                                $  2,798,713        $  2,883,068
                                                                          ----------------     ---------------

    Cash Flows from Investing Activities:
       Increase in restricted cash                                                     --          (1,383,034 )
       Additions to land and building on operating leases                      (2,004,511 )                --
       Proceeds from sale of assets                                             1,871,865           1,382,365
       Investment in joint venture                                                     --          (1,689,609 )
       Liquidating distribution from joint venture                                     --           1,663,260
       Collections on mortgage note receivable                                         --              43,760
                                                                          ----------------     ---------------
              Net cash provided by (used in) investing
                 activities                                                      (132,646 )            16,742
                                                                          ----------------     ---------------

    Cash Flows from Financing Activities:
       Distributions to limited partners                                       (2,868,756 )        (2,868,756 )
                                                                          ----------------     ---------------
              Net cash used in financing activities                            (2,868,756 )        (2,868,756 )
                                                                          ----------------     ---------------

Net Increase (Decrease) in Cash and Cash Equivalents                             (202,689 )            31,054

Cash and Cash Equivalents at Beginning of Period                                1,281,855           1,161,018
                                                                          ----------------     ---------------

Cash and Cash Equivalents at End of Period                                   $  1,079,166        $  1,192,072
                                                                          ================     ===============

Supplemental Schedule of Non-Cash Financing Activities:

       Distributions declared and unpaid at end of
          period                                                              $   956,252         $   956,252
                                                                          ================     ===============

</TABLE>
           See accompanying notes to condensed financial statements.

<PAGE>

                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 2002 and 2001


1.       Basis of Presentation:

         The accompanying  unaudited  condensed  financial  statements have been
         prepared in accordance  with the  instructions  to Form 10-Q and do not
         include  all  of the  information  and  note  disclosures  required  by
         generally  accepted  accounting  principles.  The financial  statements
         reflect all adjustments,  consisting of normal  recurring  adjustments,
         which are, in the opinion of management,  necessary to a fair statement
         of the results for the interim periods presented. Operating results for
         the  quarter and nine  months  ended  September  30,  2002,  may not be
         indicative  of the  results  that may be  expected  for the year ending
         December  31, 2002.  Amounts as of December  31, 2001,  included in the
         financial   statements,   have  been  derived  from  audited  financial
         statements as of that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund XII, Ltd. (the  "Partnership")  for the year ended December
         31, 2001.

         Effective  January  1,  2002,  the  Partnership  adopted  Statement  of
         Financial  Accounting  Standards No. 144 "Accounting for the Impairment
         or Disposal of  Long-Lived  Assets."  This  statement  requires  that a
         long-lived  asset be  tested  for  recoverability  whenever  events  or
         changes in  circumstances  indicate that its carrying amount may not be
         recoverable.   The  carrying  amount  of  a  long-lived  asset  is  not
         recoverable  if it  exceeds  the  sum of the  undiscounted  cash  flows
         expected to result from the use and eventual  disposition of the asset.
         The assessment is based on the carrying amount of the asset at the date
         it is tested for recoverability.  An impairment loss is recognized when
         the carrying amount of a long-lived asset exceeds its fair value. If an
         impairment is recognized,  the adjusted carrying amount of a long-lived
         asset is its new cost  basis.  The  statement  also  requires  that the
         results of  operations of a component of an entity that either has been
         disposed  of or is  classified  as  held  for  sale  be  reported  as a
         discontinued   operation  if  the  disposal   activity  was   initiated
         subsequent to the adoption of the Standard.

2.       Reclassification:

         Certain  items in the  prior  years'  financial  statements  have  been
         reclassified to conform to 2002 presentation.  These  reclassifications
         had no effect on total partners' capital or net income.

3.       Land and Buildings on Operating Leases:

         In June 2002, the Partnership  reinvested the majority of the remaining
         proceeds  from the 2001 sale of the property in Winter  Haven,  Florida
         and the net sales  proceeds from the sale of the property in Arlington,
         Texas  (see  Note  4)  in a  property  in  San  Antonio,  Texas  at  an
         approximate cost of $1,287,700.  The Partnership acquired this property
         from CNL Funding 2001-A,  LP, an affiliate of the general partners (see
         Note 5).

         In September  2002,  the  Partnership  reinvested the proceeds from the
         sale of the property in Valdosta, Georgia (see Note 4) in a property in
         Clive, IA for an approximate cost of $716,800. The Partnership acquired
         this property from CNL Net Lease  Investors,  L.P., an affiliate of the
         general partners (see Note 5).

4.       Discontinued Operations:

         In April 2002, the Partnership sold its property in Arlington, Texas to
         an unrelated third party for approximately  $1,288,600 and received net
         sales  proceeds  of  approximately  $1,248,200  resulting  in a gain on
         disposal of discontinued operations of $334,000.

<PAGE>
                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 2002 and 2001


4.       Discontinued Operations - Continued:

         In August 2002, the Partnership sold its property in Valdosta,  Georgia
         to an unrelated third party for approximately $627,000 and received net
         sales  proceeds  of  approximately  $623,700  resulting  in a  gain  on
         disposal of  discontinued  operations of  approximately  $167,100.  The
         financial  results for these  properties are reflected as  Discontinued
         Operations in the accompanying financial statements.

         The operating results of discontinued operations are as follows:
<TABLE>
<CAPTION>

                                                Quarter Ended September 30,       Nine Months Ended September 30,
                                                   2002             2001              2002                2001
                                              ---------------   --------------   ----------------    ---------------

 <c>
          Rental revenues                          $   9,476       $   42,344        $    72,298         $  127,032
          Expenses                                      (700 )        (25,832 )           (6,653 )          (25,832 )
          Gain on disposal of assets                 167,083               --            501,083                 --
                                              ---------------   --------------   ----------------    ---------------
          Income from discontinued
               operations                         $  175,859       $   16,512        $   566,728         $  101,200
                                              ===============   ==============   ================    ===============
</TABLE>

5.       Related Party Transactions:

         In June 2002,  the  Partnership  acquired a  property  in San  Antonio,
         Texas,   from  CNL  Funding  2001-A,   LP,  for  a  purchase  price  of
         approximately  $1,287,700  (see Note 3). CNL Funding  2001-A,  LP is an
         affiliate of the general partners. CNL Funding 2001-A, LP had purchased
         and  temporarily  held title to the property in order to facilitate the
         acquisition of the property by the Partnership. The purchase price paid
         by the  Partnership  represented  the  costs  incurred  by CNL  Funding
         2001-A, LP to acquire and carry the property.

         In September 2002, the Partnership  acquired a property in Clive,  Iowa
         from CNL Net Lease  Investors,  L.P.  ("NLI") at an approximate cost of
         $716,800.  During 2002, and prior to the  Partnership's  acquisition of
         this property,  CNL Financial LP Holding,  LP ("CFN") and CNL Net Lease
         Investors GP Corp. ("GP Corp") purchased the limited partner's interest
         and general  partner's  interest,  respectively,  of NLI. Prior to this
         transaction, an affiliate of the Partnership's general partners owned a
         0.1%  interest  in NLI and  served as a  general  partner  of NLI.  The
         original  general  partners of NLI waived  their rights to benefit from
         this  transaction.  The  acquisition  price paid by CFN for the limited
         partner's  interest was based on the portfolio  acquisition  price. The
         Partnership  acquired the property in Clive, Iowa at CFN's cost and did
         not pay any additional  compensation  to CFN for the acquisition of the
         property.  Each CNL entity is an affiliate of the Partnership's general
         partners.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         CNL Income Fund XII,  Ltd.  (the  "Partnership")  is a Florida  limited
Partnership  that was organized on August 20, 1991, to acquire for cash,  either
directly or through joint venture and tenancy in common arrangements, both newly
constructed  and  existing  restaurants,   as  well  as  Properties  upon  which
restaurants  were  to  be  constructed  (the  "Properties"),  which  are  leased
primarily  to operators of national  and  regional  fast-food  and  family-style
restaurant chains. The leases are generally  triple-net leases, with the lessees
responsible  for all repairs and  maintenance,  property  taxes,  insurance  and
utilities.  As of  September  30,  2001,  the  Partnership  owned 40  Properties
directly.  As of  September  30,  2002,  the  Partnership  owned  41  Properties
directly.  In addition, as of September 30, 2001 and 2002, the Partnership owned
seven  Properties   indirectly  through  joint  venture  or  tenancy  in  common
arrangements.

Capital Resources

         Cash from  operating  activities  (which  includes  cash  received from
tenants,  distributions  from joint  ventures,  and  interest  and other  income
received,  less cash paid for expenses) was  $2,798,713  and  $2,883,068 for the
nine months ended  September  30, 2002 and 2001,  respectively.  The decrease in
cash from operating activities for the nine months ended September 30, 2002, was
a result of changes in the  Partnership's  working capital and changes in income
and expenses, as described in "Results of Operations" below.

         Other  sources and uses of capital  included the  following  during the
nine months ended September 30, 2002.

         During the nine months ended September 30, 2002, the  Partnership  sold
its Property in Arlington,  Texas to an unrelated third party for  approximately
$1,288,600 and received net sales proceeds of approximately $1,248,200 resulting
in a gain on disposal of discontinued  operations of $334,000. In June 2002, the
Partnership reinvested the majority of the remaining proceeds from the 2001 sale
of the Property in Winter  Haven,  Florida and the net sales  proceeds  from the
sale of its Property in Arlington, Texas, in a Property in San Antonio, Texas at
an approximate cost of $1,287,700.  The Partnership  acquired this Property from
CNL Funding 2001-A,  LP, a Delaware limited  partnership and an affiliate of the
general  partners.  CNL Funding 2001-A,  LP had purchased and  temporarily  held
title to the Property in order to facilitate the  acquisition of the Property by
the  Partnership.  The purchase price paid by the  Partnership  represented  the
costs incurred by CNL Funding 2001-A, LP to acquire and carry the Property.

         During  the  quarter  and  nine  months  ended   September   2002,  the
Partnership  sold its Property in Valdosta,  Georgia to an unrelated third party
for  approximately  $627,000 and received  net sales  proceeds of  approximately
$623,700  resulting  in  a  gain  on  disposal  of  discontinued  operations  of
approximately  $167,100.  In September 2002, the  Partnership  used the proceeds
from the sale of this Property to acquire a Property in Clive, Iowa from CNL Net
Lease  Investors,  L.P.  ("NLI"),  a  California  Limited  Partnership,   at  an
approximate  cost of $716,800.  The sale of the Property and the reinvestment of
the net sales  proceeds  was  structured  to  qualify  as a  like-kind  exchange
transaction   for  federal  income  tax  purposes.   However,   the  Partnership
anticipates  that its  distributions  will be  sufficient  to enable the limited
partners to pay federal and state income taxes,  if any, (at a level  reasonably
assumed by the general  partners),  resulting  from the sale.  During 2002,  and
prior to the  Partnership's  acquisition  of this  Property,  CNL  Financial  LP
Holding, LP ("CFN"), a Delaware Limited Partnership, and CNL Net Lease Investors
GP Corp. ("GP Corp"), a Delaware  corporation,  purchased the limited  partner's
interest and general  partner's  interest,  respectively,  of NLI. Prior to this
transaction,  an affiliate of the  Partnership's  general  partners owned a 0.1%
interest in NLI and served as a general  partner of NLI.  The  original  general
partners  of NLI waived  their  rights to  benefit  from this  transaction.  The
acquisition  price paid by CFN for the limited  partner's  interest was based on
the portfolio acquisition price. The Partnership acquired the Property in Clive,
Iowa at CFN's cost and did not pay any  additional  compensation  to CFN for the
acquisition   of  the  Property.   Each  CNL  entity  is  an  affiliate  of  the
Partnership's general partners.

         Currently,  cash  reserves  and rental  income  from the  Partnership's
Properties  are invested in money market  accounts or other  short-term,  highly
liquid  investments,  such as demand deposit accounts at commercial banks, money
market  accounts and  certificates  of deposit with less than a 90-day  maturity
date, pending the Partnership's use of such funds to pay Partnership expenses or
to make  distributions  to the partners.  At September 30, 2002, the Partnership
had  $1,079,166  invested  in  such  short-term  investments,   as  compared  to
$1,281,855 at December 31, 2001.  The decrease in cash and cash  equivalents  at
September 30, 2002 was due to the fact that the Partnership reinvested a portion
of the  remaining  proceeds  from the 2001 sale of the Property in Winter Haven,
Florida.   The  funds  remaining  at  September  30,  2002,   after  payment  of
distributions  and  other  liabilities,  will be used to meet the  Partnership's
working capital needs.

Short-Term Liquidity

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them  under  triple-net  leases to  operators  who meet  specified
financial standards minimizes the Partnership's  operating expenses. The general
partners  believe  that the  leases  will  generate  net cash  flow in excess of
operating expenses.

         The Partnership's  short-term liquidity  requirements consist primarily
of the operating expenses of the Partnership.

         The general  partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

         Total   liabilities   were  $1,059,893  at  September  30,  2002,  from
$1,187,285  at December 31,  2001,  primarily as a result of a decrease in rents
paid in advance at  September  30, 2002,  as compared to December 31, 2001.  The
decrease was partially  offset by an increase in real estate taxes payable.  The
general  partners  believe that the  Partnership  has sufficient cash on hand to
meet its current working capital needs.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of operating  expenses of the Partnership,  to the extent that
the general partners  determine that such funds are available for  distribution.
Based on current and  anticipated  future cash from  operations the  Partnership
declared  distributions  to the limited  partners of $2,868,756  for each of the
nine months ended  September  30, 2002 and 2001  ($956,252  for each  applicable
quarter). This represents distributions for each of the nine months of $0.64 per
unit ($0.21 for each  applicable  quarter).  No  distributions  were made to the
general  partners for the quarters and nine months ended  September 30, 2002 and
2001. No amounts  distributed to the limited  partners for the nine months ended
September  30,  2002 and 2001 are  required  to be or have been  treated  by the
Partnership  as a return of capital  for  purposes  of  calculating  the limited
partners'  return  on their  adjusted  capital  contributions.  The  Partnership
intends to continue to make  distributions of cash available for distribution to
the limited partners on a quarterly basis.

Long-Term Liquidity

         The  Partnership  has no long-term  debt or other  long-term  liquidity
requirements.

Results of Operations

         Total  rental  revenues  were  $2,766,372  for the  nine  months  ended
September 30, 2002, as compared to $2,702,417 in the comparable  period of 2001,
of which $947,906 and $858,669 were earned during the second quarter of 2002 and
2001, respectively.  The increase in rental revenues during the quarter and nine
months ended  September  30, 2002 as compared to the same  periods of 2001,  was
primarily  due to the  Partnership  reinvesting  the  majority  of the net sales
proceeds from the 2001 sales of the Properties in Rialto,  California and Winter
Haven,  Florida in Properties in  Pflugerville  and Pasadena,  Texas in December
2001.  The increase in rental  revenues was also partially  attributable  to the
Partnership reinvesting the proceeds from the sale of the Property in Arlington,
Texas in a Property in San Antonio, Texas.

         In May 2002, Cypress  Restaurants of Georgia,  Inc., a lessee filed for
Chapter 7 bankruptcy protection.  The general partners will continue to evaluate
the Property in the  Partnership's  portfolio  that the tenant is  continuing to
operate as of  November 7, 2002.  If the lease is  rejected,  the lost  revenues
resulting  from the rejected lease will have an adverse effect on the results of
operations of the  Partnership,  if the  Partnership is not able to re-lease the
Property in a timely manner.

         For the nine months ended  September 30, 2002 and 2001, the Partnership
also earned  $21,789 and $12,485,  respectively,  in contingent  rental  income,
$7,127 and $7,877 of which was earned  during the quarters  ended  September 30,
2002 and 2001, respectively. The increase in contingent rental income during the
nine months ended  September  30, 2002,  as compared to the same period of 2001,
was primarily  attributable to an increase in gross sales for certain restaurant
Properties the leases of which require the payment of contingent rental income.

         During  the  nine  months  ended  September  30,  2002  and  2001,  the
Partnership  earned  $11,994 and  $74,708,  respectively,  in interest and other
income,  of which  $2,611 and $28,214  were  earned  during the  quarters  ended
September  30, 2002 and 2001,  respectively.  The decrease in interest and other
income during the quarter and nine months ended  September 30, 2002, as compared
to the same  periods of 2001,  was due to a decrease in the average cash balance
and a decline in interest rates.

         During  the  nine  months  ended  September  30,  2002  and  2001,  the
Partnership  earned  $307,874 and $260,226,  respectively,  attributable  to net
income  earned by joint  ventures,  of which  $101,659 and $101,078  were earned
during  the  quarters  ended  September  30,  2002 and 2001,  respectively.  The
increase in net income  earned by joint  ventures  during the nine months  ended
September  30,  2002,  as  compared to the same  period of 2001,  was  primarily
attributable to the fact that in April 2001, the Partnership invested in a joint
venture arrangement,  CNL VII, X, XII Kokomo Joint Venture, with CNL Income Fund
VII,  Ltd.,  and  CNL  Income  X,  Ltd.,  each of  which  is a  Florida  limited
partnership  and an affiliate of the general  partners.  The increase during the
nine months ended  September 30, 2002 was  partially  offset by the fact that in
March 2001,  Middleburg Joint Venture,  in which the Partnership  owned a 87.54%
interest,  sold its Property to the tenant. The Partnership  dissolved the joint
venture in accordance with the joint venture agreement.

         Operating expenses,  including  depreciation and amortization  expense,
and provision for write-down of assets were $677,108 and $1,131,326 for the nine
months ended  September 30, 2002 and 2001,  respectively,  of which $205,919 and
$175,881 were incurred  during the quarters  ended  September 30, 2002 and 2001,
respectively.  Operating  expenses  were  higher  during the nine  months  ended
September  30, 2001,  as compared to the same period of 2002, as a result of the
Partnership   recording  a  provision  for  write-down  of  assets  of  $362,265
consisting of the  accumulated  accrued  rental income  balance  relating to the
Properties  in Winter  Haven,  Florida  and Albany,  Georgia.  The tenant of the
Property  in Winter  Haven,  Florida  vacated  the  Property  and ceased  rental
payments  to the  Partnership.  The tenant of the  Property  in Albany,  Georgia
terminated  its lease with the  Partnership.  The accrued  rental income was the
accumulated amount of non-cash  accounting  adjustments  previously  recorded in
order to recognize  future  scheduled  rent  increases as income evenly over the
term of the lease. The Partnership sold the Property in Winter Haven, Florida in
December 2001 and re-leased the Property in Albany, Georgia in January 2001 to a
new tenant with lease terms  substantially the same as the  Partnership's  other
leases. In addition, operating expenses were higher during 2001, due to the fact
that the Partnership incurred certain expenses, such as repairs and maintenance,
insurance and real estate taxes in connection with the Property in Winter Haven,
Florida.  The  decrease  in  operating  expenses  during the nine  months  ended
September 30, 2002,  was also  attributable  to a decrease in the costs incurred
for administrative expenses for servicing the Partnership and its Properties.

         The increase in operating  expenses  during the quarter ended September
30, 2002 was due to  depreciation  expense  attributed to the  acquisition  of a
Property in Houston,  Texas, as described in "Capital Resources" above. Although
this  Property  replaced  a  Property  that was sold,  the  expenses  related to
disposed  Properties  are reported as  discontinued  operations in the financial
statements as required by a newly adopted accounting pronouncement, as described
below. The increase in operating  expenses was partially offset by the fact that
the Partnership  will not continue to incur expenses  related to the Property in
Winter Haven, Florida which was sold in December 2001.

         Effective  January  1,  2002,  the  Partnership  adopted  Statement  of
Financial  Accounting  Standards  No.  144  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets." This statement requires that a long-lived asset
be tested  for  recoverability  whenever  events  or  changes  in  circumstances
indicate that its carrying amount may not be recoverable. The carrying amount of
a long-lived  asset is not recoverable if it exceeds the sum of the undiscounted
cash flows  expected  to result  from the use and  eventual  disposition  of the
asset.  The assessment is based on the carrying  amount of the asset at the date
it is tested for  recoverability.  An  impairment  loss is  recognized  when the
carrying  amount of a long-lived  asset exceeds its fair value. If an impairment
is recognized,  the adjusted  carrying  amount of a long-lived  asset is its new
cost basis.  The  statement  also  requires  that the results of operations of a
component of an entity that either has been disposed of or is classified as held
for sale be reported as a  discontinued  operation if the disposal  activity was
initiated subsequent to the adoption of the Standard.

         During the nine  months  ended  September  30,  2002,  the  Partnership
identified  and sold two  Properties  that met the criteria of this standard and
were  classified  as  Discontinued  Operations  in  the  accompanying  financial
statements.  The proceeds  from the sales were  reinvested  in income  producing
Properties.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Inapplicable.


ITEM 4.  CONTROLS AND PROCEDURES

         The  general  partners  maintain  a  set  of  disclosure  controls  and
procedures  designed to ensure that information  required to be disclosed in the
Partnership's  filings  under the  Securities  Exchange Act of 1934 is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's  rules and forms. The principal  executive
and  financial  officers of the  corporate  general  partner have  evaluated the
Partnership's  disclosure  controls and  procedures  within 90 days prior to the
filing  of this  Quarterly  Report on Form  10-Q and have  determined  that such
disclosure controls and procedures are effective.

         Subsequent to the above evaluation,  there were no significant  changes
in internal  controls or other  factors  that could  significantly  affect these
controls,   including  any   corrective   actions  with  regard  to  significant
deficiencies and material weaknesses.

<PAGE>
                           PART II. OTHER INFORMATION


Item 1.    Legal Proceedings.   Inapplicable.

Item 2.    Changes in Securities.   Inapplicable.

Item 3.    Default upon Senior Securities.   Inapplicable.

Item 4.    Submission of Matters to a Vote of Security Holders.   Inapplicable.

Item 5.    Other Information.   Inapplicable.

Item 6.    Exhibits and Reports on Form 8-K.

           (a)   Exhibits

                  3.1      Affidavit and  Certificate of Limited  Partnership of
                           CNL Income Fund XII, Ltd. (Included as Exhibit 3.2 to
                           Registration  Statement No.  33-43278-01 on Form S-11
                           and incorporated herein by reference.)

                  4.1      Affidavit and  Certificate of Limited  Partnership of
                           CNL Income Fund XII, Ltd. (Included as Exhibit 3.2 to
                           Registration  Statement No.  33-43278-01 on Form S-11
                           and incorporated herein by reference.)

                  4.2      Amended and Restated Agreement of Limited Partnership
                           of CNL Income Fund XII, Ltd. (Included as Exhibit 4.2
                           to Form 10-K filed with the  Securities  and Exchange
                           Commission on April 15, 1993, and incorporated herein
                           by reference.)

                  10.1     Management  Agreement  between  CNL Income  Fund XII,
                           Ltd. and CNL Investment  Company (Included as Exhibit
                           10.1 to Form  10-K  filed  with  the  Securities  and
                           Exchange   Commission   on  April   15,   1993,   and
                           incorporated herein by reference.)

                  10.2     Assignment   of   Management   Agreement   from   CNL
                           Investment Company to CNL Income Fund Advisors,  Inc.
                           (Included as Exhibit 10.2 to Form 10-K filed with the
                           Securities and Exchange Commission on March 31, 1995,
                           and incorporated herein by reference.)

                  10.3     Assignment  of Management  Agreement  from CNL Income
                           Fund  Advisors,  Inc.  to  CNL  Fund  Advisors,  Inc.
                           (Included as Exhibit 10.3 to Form 10-K filed with the
                           Securities and Exchange  Commission on April 1, 1996,
                           and incorporated herein by reference.)

                  10.4     Assignment of Management Agreement from CNL Advisors,
                           Inc. to CNL APF  Partners,  LP.  (Included as Exhibit
                           10.4 to Form  10-Q  filed  with  the  Securities  and
                           Exchange   Commission   on  August  13,   2001,   and
                           incorporated herein by reference.)

                  10.5     Assignment  of  Management  Agreement  from  CNL  APF
                           Partners, LP to CNL Restaurants XVIII, Inc. (Included
                           as   Exhibit   10.5  to  Form  10-Q  filed  with  the
                           Securities  and  Exchange  Commission  on August  13,
                           2002, and incorporated herein by reference.)

                  99.1     Certification of Chief Executive Officer of Corporate
                           General Partner Pursuant to 18 U.S.C. Section 1350 as
                           Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                           Act of 2002. (Filed herewith.)

                  99.2     Certification of Chief Financial Officer of Corporate
                           General Partner Pursuant to 18 U.S.C. Section 1350 as
                           Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                           Act of 2002. (Filed herewith.)

                  (b)      Reports on Form 8-K

                           No reports on Form 8-K were filed  during the quarter
                           ended September 30, 2002.
<PAGE>
                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended,  the  registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

         DATED this 11th day of November, 2002.



                                            CNL INCOME FUND XII, LTD.

                                            By:CNL REALTY CORPORATION
                                               General Partner


                                               By:/s/ James M. Seneff, Jr.
                                                  ---------------------------
                                                  JAMES M. SENEFF, JR.
                                                  Chief Executive Officer
                                                  (Principal Executive Officer)


                                               By:/s/ Robert A. Bourne
                                                  ---------------------------
                                                  ROBERT A. BOURNE
                                                  President and Treasurer
                                                  (Principal Financial and
                                                  Accounting Officer)
<PAGE>



                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                          OF CORPORATE GENERAL PARTNER

                 PURSUANT TO RULE 13a-14 AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


         I, James M.  Seneff,  Jr.,  the Chief  Executive  Officer of CNL Realty
Corporation,  the  corporate  general  partner of CNL Income Fund XII, Ltd. (the
"registrant"), certify that:

         1. I  have  reviewed  this  quarterly   report  on  Form  10-Q  of  the
            registrant;

         2. Based on my knowledge,  this  quarterly  report does not contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such  statements  were made, not misleading with respect
            to the period covered by this quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the  registrant as of, and for, the periods  presented
            in this quarterly report;

         4. The registrant's  other certifying officer and I are responsible for
            establishing and maintaining  disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the  registrant
            and we have:

                a. designed such  disclosure  controls and  procedures to ensure
                   that  material   information   relating  to  the  registrant,
                   including its consolidated subsidiaries,  is made known to us
                   by others  within  those  entities,  particularly  during the
                   period in which this quarterly report is being prepared;

                b. evaluated the  effectiveness of the  registrant's  disclosure
                   controls and  procedures as of a date within 90 days prior to
                   the filing date of this  quarterly  report  (the  "Evaluation
                   Date"); and

                c. presented in this quarterly report our conclusions  about the
                   effectiveness of the disclosure controls and procedures based
                   on our evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officer and I have  disclosed,
            based on our most recent  evaluation,  to the registrant's  auditors
            and the audit  committee  of  registrant's  board of  directors  (or
            persons  performing the  equivalent  function):

                a. all  significant  deficiencies  in the design or operation of
                   internal   controls   which   could   adversely   affect  the
                   registrant's ability to record, process, summarize and report
                   financial  data  and  have  identified  for the  registrant's
                   auditors any material weaknesses in internal controls; and

                b. any fraud, whether or not material,  that involves management
                   or  other  employees  who  have  a  significant  role  in the
                   registrant's internal controls; and

         6. The registrant's  other  certifying  officer and I have indicated in
            this quarterly report whether or not there were significant  changes
            in internal  controls or in other  factors that could  significantly
            affect internal  controls  subsequent to the date of our most recent
            evaluation,   including  any  corrective   actions  with  regard  to
            significant deficiencies and material weaknesses.

Date:  November 11, 2002


/s/ James M. Seneff, Jr.
-----------------------------
James M. Seneff, Jr.
Chief Executive Officer

<PAGE>


                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
                          OF CORPORATE GENERAL PARTNER

                 PURSUANT TO RULE 13a-14 AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

         I, Robert A. Bourne, President and Treasurer of CNL Realty Corporation,
the corporate  general  partner of CNL Income Fund XII, Ltd. (the  "registrant")
certify that:

         1. I  have  reviewed  this  quarterly   report  on  Form  10-Q  of  the
            registrant;

         2. Based on my knowledge,  this  quarterly  report does not contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such  statements  were made, not misleading with respect
            to the period covered by this quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the  registrant as of, and for, the periods  presented
            in this quarterly report;

         4. The registrant's  other certifying officer and I are responsible for
            establishing and maintaining  disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the  registrant
            and we have:

                a. designed such  disclosure  controls and  procedures to ensure
                   that  material   information   relating  to  the  registrant,
                   including its consolidated subsidiaries,  is made known to us
                   by others  within  those  entities,  particularly  during the
                   period in which this quarterly report is being prepared;

                b. evaluated the  effectiveness of the  registrant's  disclosure
                   controls and  procedures as of a date within 90 days prior to
                   the filing date of this  quarterly  report  (the  "Evaluation
                   Date"); and

                c. presented in this quarterly report our conclusions  about the
                   effectiveness of the disclosure controls and procedures based
                   on our evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officer and I have  disclosed,
            based on our most recent  evaluation,  to the registrant's  auditors
            and the audit  committee  of  registrant's  board of  directors  (or
            persons performing the equivalent function):

                a. all  significant  deficiencies  in the design or operation of
                   internal   controls   which   could   adversely   affect  the
                   registrant's ability to record, process, summarize and report
                   financial  data  and  have  identified  for the  registrant's
                   auditors any material weaknesses in internal controls; and

                b. any fraud, whether or not material,  that involves management
                   or  other  employees  who  have  a  significant  role  in the
                   registrant's internal controls; and

         6. The registrant's  other  certifying  officer and I have indicated in
            this quarterly report whether or not there were significant  changes
            in internal  controls or in other  factors that could  significantly
            affect internal  controls  subsequent to the date of our most recent
            evaluation,   including  any  corrective   actions  with  regard  to
            significant deficiencies and material weaknesses.


Date:  November 11, 2002


/s/ Robert A. Bourne
------------------------------
Robert A. Bourne
President and Treasurer
<PAGE>



                                  EXHIBIT INDEX


Exhibit Number

        (c)   Exhibits

                3.1      Affidavit and Certificate of Limited Partnership of CNL
                         Income  Fund XII,  Ltd.  (Included  as  Exhibit  3.2 to
                         Registration Statement No. 33-43278-01 on Form S-11 and
                         incorporated herein by reference.)

                4.1      Affidavit and Certificate of Limited Partnership of CNL
                         Income  Fund XII,  Ltd.  (Included  as  Exhibit  3.2 to
                         Registration Statement No. 33-43278-01 on Form S-11 and
                         incorporated herein by reference.)

                4.2      Amended and Restated  Agreement of Limited  Partnership
                         of CNL Income Fund XII,  Ltd.  (Included as Exhibit 4.2
                         to Form 10-K filed  with the  Securities  and  Exchange
                         Commission on April 15, 1993, and  incorporated  herein
                         by reference.)

                10.1     Management  Agreement between CNL Income Fund XII, Ltd.
                         and CNL Investment Company (Included as Exhibit 10.1 to
                         Form  10-K  filed  with  the  Securities  and  Exchange
                         Commission on April 15, 1993, and  incorporated  herein
                         by reference.)

                10.2     Assignment of Management  Agreement from CNL Investment
                         Company to CNL Income Fund Advisors,  Inc. (Included as
                         Exhibit 10.2 to Form 10-K filed with the Securities and
                         Exchange Commission on March 31, 1995, and incorporated
                         herein by reference.)

                10.3     Assignment of Management Agreement from CNL Income Fund
                         Advisors,  Inc. to CNL Fund Advisors, Inc. (Included as
                         Exhibit 10.3 to Form 10-K filed with the Securities and
                         Exchange  Commission on April 1, 1996, and incorporated
                         herein by reference.)

                10.4     Assignment of Management  Agreement  from CNL Advisors,
                         Inc. to CNL APF Partners, LP. (Included as Exhibit 10.4
                         to Form 10-Q filed  with the  Securities  and  Exchange
                         Commission on August 13, 2001, and incorporated  herein
                         by reference.)

                10.5     Assignment  of  Management   Agreement   from  CNL  APF
                         Partners,  LP to CNL Restaurants  XVIII, Inc. (Included
                         as Exhibit 10.5 to Form 10-Q filed with the  Securities
                         and  Exchange   Commission  on  August  13,  2002,  and
                         incorporated herein by reference.)

                99.1     Certification  of Chief Executive  Officer of Corporate
                         General Partner  Pursuant to 18 U.S.C.  Section 1350 as
                         Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
                         Act of 2002. (Filed herewith.)

                99.2     Certification  of Chief Financial  Officer of Corporate
                         General Partner  Pursuant to 18 U.S.C.  Section 1350 as
                         Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
                         Act of 2002. (Filed herewith.)


<PAGE>

                                  EXHIBIT 99.1


<page>



                                  EXHIBIT 99.2